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Migration: a burden or a blessing for natives?

Author

Listed:
  • Jean J. Gabszewicz

    (CORE, Université Catholique de Louvain, Belgique)

  • Skerdilajda Zanaj

    (CREA, Université du Luxembourg)

Abstract

We analyse the effects of migration on the production of public goods, income taxes, and on the welfare of residents in the sending and in the receiving country. Migration is based on income differences between countries. Different alternative scenarios are considered. In the first, we assume fully flexible wages in both countries and we show that migration is welfare detrimental only for origin country. In the second scenario, wages are rigid. With upward wage rigidity, migration has detrimental effects for natives of the origin country but it brings benefits to the natives of the destination country. Finally, migration can be welfare detrimental for both countries, under downward wage rigidities.

Suggested Citation

  • Jean J. Gabszewicz & Skerdilajda Zanaj, 2014. "Migration: a burden or a blessing for natives?," DEM Discussion Paper Series 14-01, Department of Economics at the University of Luxembourg.
    • Handle: RePEc:luc:wpaper:14-01
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    References listed on IDEAS

    as
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    More about this item

    Keywords

    migration; public goods; income taxes; labor market rigidities;
    All these keywords.

    JEL classification:

    • F2 - International Economics - - International Factor Movements and International Business
    • H2 - Public Economics - - Taxation, Subsidies, and Revenue
    • H4 - Public Economics - - Publicly Provided Goods

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